Sole Trader status as consultant

[jamesbrown]

That's a helpful way to look at it, thanks. Just really worried that the client is going to end up seeing this as a risk and either terminate or limit the arrangement in some way. Which would be incredibly annoying.

Agree, but that does seem like a possible outcome. Basically, the client has likely misunderstood and panicked in light of the proposed changes to IR35. Your best bet is to ensure they understand that IR35 is irrelevant here, but perhaps it has woken them to the existing situation, unrelated to IR35. The problem for them is that, if they decide to move the position on payroll, there’s likely a good argument that employment rights were missing before. So the client is arguably taking a bigger risk by not continuing BAU.

[dl8860]

Agree, but that does seem like a possible outcome. Basically, the client has likely misunderstood and panicked in light of the proposed changes to IR35. Your best bet is to ensure they understand that IR35 is irrelevant here, but perhaps it has woken them to the existing situation, unrelated to IR35. The problem for them is that, if they decide to move the position on payroll, there’s likely a good argument that employment rights were missing before. So the client is arguably taking a bigger risk by not continuing BAU.

Yeah all true. I really dislike the existing structure where HMRC makes it seem like anyone who is self-employed and doesn't want employment rights is some sort of exploited person. And if you are happy with the arrangement, you should always be looking over your shoulder for the system to come in and balls up things working perfectly well.

[WordIsBond]

You're overthinking this.

She should write to the client saying, "IR35 is intermediaries legislation. I do not work through a limited company or any other intermediary, I am a sole trader, and fully taxed on my income. IR35 does not apply.

"This is evidenced by my invoices which are not in the name of a limited company."

That should end it. If they want to take it further, she should say, "It is not in anyone's interest to argue that this is false self-employment. We've entered into this relationship on that understanding to protect you, not me."

If they end up deciding that she's an employee and should be taxed accordingly then she needs to ask for back holiday pay, etc.